PIA Amendment: Finance Ministry to hold all shares in NNPCL for FG; NUPRC to replace NNPCL as concessionaire

President Bola Tinubu has approved a proposal finetuned by the Attorney General of the Federation and Minister of Justice, Prince Lateef Fagbemi, SAN, to amend the Petroleum Industry Act [PIA].

Relevant agencies of the federal government have been notified of the presidential approval to secure requisite bureaucratic support preparatory to presentation of the amendment bill to the National Assembly.

The proposed legislation is entitled the Petroleum Industry Act (Amendment) Bill 2025.

Although finetuned by the Office of the Attorney General of the Federation, the objective of the proposed amendment, which was actually initiated by the Office of the Minister of Finance, is to address the “escalating fiscal leakage and revenue loss confronting the Federation.”

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A report in September 13, 2025 edition of africaoilgasreport.com quoted the Attorney General on the subject.

It said the Attorney-General called for a meeting to “deliberate on the early implementation of the President’s directives on the proposed amendments”.

● Key changes envisaged by the amendments

The most consequential part of the proposed amendments is the overhaul of Section 8, which outlines the commercial regulatory functions of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

In addition to its existing roles of reviewing and approving the commercial aspects of field development plans in upstream petroleum operations and developing cost studies and benchmarks for evaluating upstream petroleum operations, the amendment proposes that: “the NUPRC will act as the government representative in all model contracts attached to licenses and leases contemplated in Section 85.

“The NUPRC will replace the Nigerian National Petroleum Company Limited (NNPCL) as the concessionaire in all subsisting Production Sharing Contracts, Profit Sharing Contracts, and Risk Service Contracts.

“In this role, the NUPRC will be responsible for evaluating and approving all relevant work programmes and verifying and approving all contractor costs to determine cost-recoverable expenditure under these contracts.”

● Ownership structure changes

The amendment, acvotding to the report, also sought to oust the Ministry of Petroleum Incorporated (MOPI) as a co-equal shareholder of NNPCL with the Ministry of Finance Incorporated (MOFI).

To achieve this, Section 53 of the PIA will be amended to read: “Ownership of all shares in NNPC Limited shall be vested in the Federation at Incorporation and held by the Ministry of Finance Incorporated as the sole bare agent of the Federation.”

● Changes to integrated operations

The proposed amendment, as reported, called for a reversal of a settlement from the early days of the Tinubu administration, regarding the delineation of duties between the NUPRC and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) on integrated joint operations.

The current law states that “where in situ facilities or fixed or floating platforms or vessels provide for fully integrated upstream and midstream petroleum operations, the Commission shall consider and the Commission shall be in charge of such integrated operations and petroleum operations may be considered integrated where there is a joint use of utilities used exclusively for the upstream and midstream operations.”

The amendment proposes a deletion of this provision and instead proposes the constitution of a joint project team of NUPRC and NMDPRA to be responsible for the technical regulation of integrated operations.

● Concerns over governance and strategic direction

The amendment introduces significant changes to the governance structure of the NNPCL, raising serious concerns about its operational autonomy and strategic direction.

By transferring the responsibility of setting the strategic direction and objectives of the NNPCL board and corporation to the Ministry of Finance Incorporated (MOFI) as a single agent, the amendment, as contended, “risks undermining the principles of modern corporate governance.”

This shift positions MOFI as a “bare agent” of the Federation, effectively weakening the NNPCL Board’s autonomy in steering the corporation.

Such a move, as argued, could open the door to excessive political influence over corporate priorities, eroding the separation of ownership from management that is critical for effective governance.

Moreover, this restructuring reduces NNPCL’s commercial independence, as the Board would primarily serve as an executor of MOFI’s directives.

This could severely limit NNPCL’s ability to make agile, commercially responsive decisions, particularly in the fast-paced global energy markets.

As a finance-focused entity, MOFI may prioritise fiscal or political considerations over operational efficiency, competitiveness, and long-term sustainability, potentially distorting investment priorities and stifling innovation or partnerships.

The amendment also poses risks to investor confidence, as it appears to reverse the PIA’s original intent to professionalise and commercialise NNPCL.

Potential investors may perceive this shift as a re-politicisation of the corporation, undermining trust in its governance and reducing interest in partnerships or capital inflows.

Additionally, with MOFI driving strategy, the NNPCL Board’s role in accountability and performance management will be weakened, creating ambiguity over who bears ultimate responsibility for the corporation’s operational and financial outcomes.

Source: africaoilgasreport.comSep